The No. 1 sign you can afford to buy a home

If you're planning to settle down in the same place for a number of years, you've more than likely considered the possibility of buying a house.

But can you afford to?

The first thing to check is your cash flow: You should be able to pay all of your bills and still put money into savings each month for sure. Combined with that, the top sign you're ready to buy a house comes down to your motivation for buying.

You should want to buy a home for the right reasons, says Eric Roberge, CFP and founder of Beyond Your Hammock.

When asked why you want to make the jump from renting to buying, your first answer shouldn't be something along the lines of "Because I'm wasting money on rent" or "Because it's a good investment." At the end of the day, buying a home isn't a means of getting rich.

"When you look at the average price increase of a home across the country over the last 100 years, it's only about 3%," Roberge says. "If you take away extra costs plus inflation, you're not really making any money on average on a single family home."

It's smarter to look for a house that meets non-monetary goals: It's in your dream neighborhood, you're planning to start a family, or you want a place that you can make your own. It should also be a place you plan on staying in for the foreseeable future - at least seven to 10 years.

"A home is a utility, not an investment," Roberge says.

Todd Sinai, a real-estate professor at the Wharton School of the University of Pennsylvania, agrees.

"People get caught up in this notion of 'Oh, if I buy a house it's an investment, so I can do it at any time,' but it's not," Sinai recently told Business Insider.

Your housing budget should reflect your individual needs and goals, regardless of housing market trends. Do it for your future, not your bank account.